Desperately need some legal advice

Gamefreak501

Gamefreak501

Gamefreak501

Soldato
Joined
7 Aug 2003
Posts
8,030
Location
Bedfordshire
Hey everyone,

I am just wondering if I may have a legal case here or not. I know I should really be going to a Legal body first, but I just want to know the chances my case may hold up in court.

To cut a long story short, my business partner has run up debts on the business account. It has come to a head now, with demands for the outstanding money to be paid to an external debt company.

I am wondering if I can perhaps send my business partner to court over fraudulent use of the account, or over the fact that he ran up these charges not me. I have a feeling this may be difficult to prove - we both had access to a debit card (which I never used) and he also had access to a cheque book, which I was hoping wasn't going to be used in this way, but it was.

On a sidepoint, I have more than enough in savings to pay this debt and be done with it...but I would feel really hard done by having to do this and this may make it even harder to get any of this money back.

All help greatly appreciated.
 
i am not a legal person, but did you know he was doing this? can you prove you didnt know? when you say you was HOPING the cheque book wouldnt be used this way, does that mean you suspected it would be? why didnt you hide it?
put the company in his name quick, and get out, are the debts large? bankrupsy? and setup on your own new name, new owner?
 
Thank you for your reply;

I had a feeling he might do - because he has run up debts before - he is still paying them back now, he did have a gambling problem and with regard to the cheque book, although I was concerned, I didn't think he would be stupid or crafty enough to use it in this way. But he did.

The debts aren't that large - talking under £1200, but I am still annoyed by what he did.

I am not sure I can prove I didn't know - I had phone calls few and far between from the Bank stating that the overdraft had reached a certain point but I wasn't in a position to pay it back. I started putting a little money in each month, but as money got tighter, I had to stop, as I was also made redundant then the Bank escalated it so a debt agency now deals with it.

I am not sure I can put the company in his name but I am going to phone up the said debt agency and give them his girlfriends mobile number and his full postal address as well.

Thanks again,

David
 
Gamefreak501 said:
Hey everyone,

I am just wondering if I may have a legal case here or not. I know I should really be going to a Legal body first, but I just want to know the chances my case may hold up in court.

To cut a long story short, my business partner has run up debts on the business account. It has come to a head now, with demands for the outstanding money to be paid to an external debt company.

I am wondering if I can perhaps send my business partner to court over fraudulent use of the account, or over the fact that he ran up these charges not me. I have a feeling this may be difficult to prove - we both had access to a debit card (which I never used) and he also had access to a cheque book, which I was hoping wasn't going to be used in this way, but it was.

On a sidepoint, I have more than enough in savings to pay this debt and be done with it...but I would feel really hard done by having to do this and this may make it even harder to get any of this money back.

All help greatly appreciated.
Click to expand...

depends on the formation of the company....

If you've got a partnership agreeement, or are a limited company and are both named as owner/directors, then you would be jointly responsible,

if you look here...
http://books.google.co.uk/books?id=...12n1Oql&sig=pOABW1ULzKUUtVtXd2DxkhC58S8&hl=en
(handy that google allows book previews) you'll see the tie in to it
 
Thank you for your replies.

There was no deed of partnership, we just called the account a 'Partnership' account.

It does look to me like we will be jointly responsible... but I should not really have to fork out for my business partners debt out of principle.

I have a feeling that by going to a Solicitors, they'll say the case won't hold any water. So I'll direct the debt company to him in the hope he'll sort out the mess he got us both in but as always, I will probably have to pick up the pieces from other peoples messes.

Thanks again,

David
 
Gamefreak501 said:
Thank you for your replies.

There was no deed of partnership, we just called the account a 'Partnership' account.

It does look to me like we will be jointly responsible... but I should not really have to fork out for my business partners debt out of principle.

I have a feeling that by going to a Solicitors, they'll say the case won't hold any water. So I'll direct the debt company to him in the hope he'll sort out the mess he got us both in but as always, I will probably have to pick up the pieces from other peoples messes.

Thanks again,

David
Click to expand...

If you want to carry on your business relationship with the bloke get your selves setup as a limited company.

That way although the company can go down it can't take you down with it.
 
Thank you for your reply!

I really do not wish to have anything else to do with the bloke. I'm actually warming up to the idea of just paying the outstanding debt out with my savings and then cleaning him out in the small claims court.

Does that sound like a good plan to anyone?

Thanks,

David
 
It's a partnership so you're responsible for debts if he does a runner. If the business goes in to liquidation you're as responsible as him. If it had been a limited liability partnership it would be different.

I'm not sure if you can sue him for the debt that he's undertaken. My company law book only goes as far as saying all partners are liable. It's mainly all about LTDs and PLCs sorry.
 
Gamefreak501 said:
Thank you for your reply!

I really do not wish to have anything else to do with the bloke. I'm actually warming up to the idea of just paying the outstanding debt out with my savings and then cleaning him out in the small claims court.

Does that sound like a good plan to anyone?

Thanks,

David
Click to expand...

I would get legal advice before even contemplating that idea.

Effectively your just saying to the other person "here, take my savings".
 
Is there anyway you can buy him out of the business using the debt (that you could pay off) as a bargaining tool? Or make an arrangement with him that you get a bigger share of the profits because of this?

If you do continue business with him it's vital for reasons like this that you are a limited company with limited liability. You're very lucky the debt isn't much bigger as both of you would be liable for it not just him.
 
i'm amazed no-one else has mentioned this:

But why in hades did you go into business with this dude in the first place, if you were aware of his gambling and debt problems????
 
Business partners are jointly and severally liable for debts of the partnership. It's up to you to pay. If you choose to pursue him for the debts, that's fine, but first and foremost it is your responsibility to pay the debts if he can't or won't.
 
You don't have any recourse as you entered into a credit agreement under which you had joint and several liability. If it's gone to debt collectors, you're too late anyway, your personal credit record has been damaged as well. Pay it off now and get out of the business relatonship tbh.
 
Thank you very much for your help everyone.

I was expecting one or two of you to mention the credit agreement and how it is now up to me to pay for it if my business partner and that's what I needed to know.

I'll be on the telephone to the company on Monday of if they're shut, Tuesday pay off this and go to the CAB and some legal bodies...and if they can't help, well lesson learned I guess.

Thanks again everyone,

David
 
I really sympathise. We were in a similar position some months ago and, as matthew_o50 suggests, used the debts as a bargaining tool to get rid of the person in question. It took months and months to pay the debt, but we came out on top in the end.
 
Hey everyone,

Made some progress. Got in touch with the bloke and he is agreeing with a repayment plan. I'm going to speak to him tomorrow morning (as we both have the day off) and then we will go from there.

Then I'll get in touch with the debt collectors and be firm with them and push for a repayment over a period of time. When all this is done and dusted, I (or maybe we) will get the bank charges back...

Oh well, fingers crossed for tomorrow.

As for the business itself, it fell flat...and some time ago, we both decided our efforts would be wasted if we pursued it further. I for one am going to eventually, when all this blows over, make my own business but I will never trust anyone else to be my business partner again and will be going in business for myself and by myself. I can then avoid making the same mistakes next time around.

Thanks again for all your replies,

David
 
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